(2022-10-10-ны өдрийн байдлаар хянасан орчуулга)                    Unofficial translation

LAW OF MONGOLIA

 May 31, 2013                                 Ulaanbaatar city

LAW ON ANTI-MONEY LAUNDERING AND COMBATING THE FINANCING OF TERRORISM

/Revised version/

CHAPTER ONE

GENERAL PROVISIONS

Article 1.Purpose of this law

1.1.The purpose of this law shall be to establish the legal basis of organizing preventative measures and combating money laundering and the financing terrorism.

Article 2.Legislation on Combating Money Laundering and Financing Terrorism

2.1.The legislation on combating money laundering and financing terrorism shall consist of the Constitution of Mongolia, the Criminal Code, this law and other legislative acts enacted in compliance with these laws.

2.2.In case an international treaty to which Mongolia is a party provides otherwise than this Law, the provisions of the international treaty shall prevail.

Article 21.Scope of this law

21.1.All provisions to combat and prevent money laundering and the financing terrorism specified in this law shall be applicable to any activity for combatting and preventing from proliferation financing of weapon of mass destruction to the same extent.

/This Article was added according to the law of April 26, 2018/

Article 3.Definitions of legal terms

3.1.The following terms used in this law shall be understood as follows:

3.1.1.'Money laundering' shall mean the acquisition, possession or use of income, money and assets knowing that they are proceeds of committed crime or transfer or conversion of such proceeds to conceal their illicit origins and to assist entities involved in committing crimes to avoid legal liabilities, or disguise their true natures, origins, locations, administration, ownership, and property rights.

/This subparagraph was revised according to the law of April 26, 2018/

3.1.2.'Financing terrorism' shall mean the direct or indirect accumulation, alteration, transfer and expenditure of assets by terrorist entities knowing that they will be used to carry out terrorist act and activities;

/This subparagraph was revised according to the law of October 10, 2019/

3.1.3.'Cash transaction' shall mean a transaction made using local and foreign banknotes as well as cheques, bills and securities widely used in international settlements.

3.1.4.'Non-cash transactions' shall mean transactions made using internationally accepted payment orders, invoices, letters of credit, collection services, payment cards, electronic settlements, leverage, loans and other means of payment settlement;

3.1.5.'Politically influential person' shall mean an individual defined in Paragraph 20.2 of the Law on Regulation of Public and Private Interests in Public Service and Prevention of Conflict of Interest or an official who is equivalent to counterpart of foreign country or official of international organization.

/This subparagraph was amended according to the law of April 26, 2018/

3.1.6.'Beneficial owner' shall mean:

/This subparagraph was amended according to the law of April 26, 2018/

3.1.6.a.if a customer is legal entity then a person who has a significant or controlling ownership interest solely or jointly with others or holds a management function of the legal entity or is represented by other persons or ultimately owns the legal entity earning benefit and profit by exercising control of the legal entity and its arrangement;

3.1.6.b.if a customer is an individual then a person who controls customers' actions and activity or represented by the persons benefiting from it;

3.1.6.c.as for an asset management transaction, a person who earns benefit or profit by exercising ultimate effective control over the asset management transaction.

3.1.7.'shell bank' shall mean a bank whose management and operations have no physical presence in a country in which it is licensed and registered, or bank which is not affiliated to financial organization that is subject to specifically arranged and integrated superintendence.

/This subparagraph was amended according to the law of April 26, 2018/

3.1.8.'Customer' shall mean a person who is receiving services provided by the entities specified in 4.1 of this law;

3.1.9.'Asset' is defined as pursuant to Article 83 of the Civil Code of Mongolia.

/This subparagraph was amended according to the law of April 26, 2018/

3.1.10.'Proceeds of crime' is defined as pursuant to 2 of Article 7.5 of Criminal Code.

/This subparagraph was amended according to the law of April 26, 2018/

3.1.11.'Financing the proliferation of weapon of mass destruction' shall mean as stated in 3.1.20 of the Law on Combating and Proliferation of Weapon of Mass Destruction and Terrorism.

/This subparagraph was added according to the law of April 26, 2018/

/This subparagraph was amended according to the law of October 10, 2019/

3.1.12.'Dealers of precious metals, precious stones and sellers of jewelry made by them' shall mean a person engaged in commercial activity of trading precious metals, precious stones and jewelry made by them.

/This subparagraph was added according to the law of April 26, 2018/

3.1.13.'Asset management' shall mean using, possessing and settling a client's assets on behalf of the client.

/This subparagraph was added according to the law of April 26, 2018/

3.1.14.'Financial advisory services' shall mean tax advisory services and audit verification services.

/This subparagraph was added according to the law of January 17, 2020/

CHAPTER TWO

PREVENTATIVE MEASURES

 Article 4.Reporting entities

4.1.The following entities shall be obliged to report to the Financial Information Unit specified in 16.1 of this law on transactions specified in Article 7 of this law:

4.1.1.Banks;

4.1.2.Non-banking financial institutions;

4.1.3.Insurance companies and insurance licensed entities;

4.1.4.Investment funds and investment management companies;

/This subparagraph was amended according to the law of April 26, 2018/

4.1.5.Professional organization of stock market;

4.1.6.Saving and credit cooperatives;

4.1.7.Real estate brokers in cases where any activity involving purchase or sale of real estates is undertaken;

/This subparagraph was amended according to the law of April 26, 2018/

/This subparagraph was amended according to the law of January 17, 2020/

4.1.8.Dealers of precious metals and precious stones, or traders engaged in sales of Articles made with aforementioned if they have engaged in cash money transactions with monetary amount specified in Subparagraph 5.1.2 of this law;

/This subparagraph was amended according to the law of April 26, 2018/

/This subparagraph was amended according to the law of January 17, 2020/

4.1.9.Notaries, lawyers, accountants and other financial counsellors-when they have prepared, executed or took part in the following activities on behalf of their clients:

4.1.9.a.Buying and selling of real estate;

4.1.9.b.Management of client's assets;

4.1.9.c.Management of bank, savings or securities accounts;

4.1.9.d.Incorporating a company and arrangement of drawing and collection of properties for conducting and managing its activities;

4.1.9.e.Incorporating a legal entity, conducting and managing its activities or conduct and manage certain activity based on negotiation or purchasing and selling business entity.

/This subparagraph was added according to the law of April 26, 2018/

/This subparagraph was amended according to the law of January 17, 2020/

4.1.10.Service provider of virtual assets

/This subparagraph was added according to the law of December 17, 2021/

4.1.11.Person conduct in money credit activities specified in the Law on Money credit activities.

/This subparagraph was added according to the law of November 11, 2022 and shall be enforced on March 1, 2023/

4.2.Entity specified in Paragraph 4.1 of this law shall be prohibited to open an anonymous, or numbered account, or an account in fictitious names, or make a transaction from or to such accounts, or use closed accounts.

4.3.Entities specified in Paragraph 4.1 of this law shall assess risk of money laundering or financing terrorism in relation to the following types of risks by taking into consideration the specifics of own activity and scope:

4.3.1.customer risk;

4.3.2.product and service risk;

4.3.3.product and service delivery form and channel risk;

4.3.4.geographic risk;

/This paragraph was added according to the law of April 26, 2018/

4.4.Documents and information used for assessing risks specified in Paragraph 4.3 of this law shall be retained for the term specified in Article 8 of this law and they shall be kept being available to show immediately to supervisor or state inspector.

/This paragraph was added according to the law of April 26, 2018/

Article 41.Identifying the beneficial owner

/This Article was added according to the law of April 26, 2018/

41.1.The beneficial owners should be identified through the following steps:

41.1.1.The identity of person who is solely controlling the majority of shares or jointly with others;

41.1.2.If it impossible to identify the person specified in Subparagraph 41.1.1 of this law, then the identity of person who is indirectly managing the operation of legal entity or person whose rights are represented by others;

41.1.3.If it impossible to identify the person specified in Subparagraphs 41.1.1 and 41.1.2 of this law, the identity of relevant person who is managing legal entity.

41.2.The procedure specified in Paragraph 5.14 of this law shall regulate the detailed activity to implement regarding identification of beneficial owner.

Article 5.Customer due diligence

5.1.Entities specified in Paragraph 4.1 of this law are obliged to identify and verify customer information using official sources of information and documents in the following circumstances:

5.1.1.Prior to establishing a business relation;

/This subparagraph was amended according to the law of January 17, 2020/

5.1.2.Prior to conducting occasional transactions equal to or more than 20 million Tugrugs (or equivalent foreign currency) of the entity that has no permanent bank account and not established consistent business relations;

5.1.3.If the total sum of several inter-related transactions made within 24 hours is 20 million Tugrugs (equivalent foreign currency) or above even if the individual value of any of these transactions is less than the threshold specified in Subparagraph 5.1.2;

5.1.4.If there are doubts about the authenticity and accuracy of previously obtained information on the customer;

5.1.5.If there are grounds to suspect that the customer or the transaction is involved with money laundering or financing terrorism;

5.2.For the purposes of identifying and verifying a customer pursuant to Paragraph 5.1 of this law, entities specified in Paragraph 4.1 of this law shall undertake the following measures:

5.2.1.If a customer is an individual, entities shall request the customer's full name, date of birth, registration number, and a copy of identify card or foreign passport /an officer who receives the information shall verify it with the original document and make a note about the authenticity free of charge/ and request notarized copies documents if they were delivered by post;

5.2.2.If a customer is a legal entity, request its name, address, national registration and tax payer number, contact phone number, a copy of its national registration certificate /an officer who receives the information shall verify it with the original document and make a note about the authenticity free of charge/ and request notarized copies of the documents if they were delivered by post and detailed information on its management;

5.2.3.For the purposes of understanding and knowing whether account is opened and transaction is conducted on behalf of beneficial owner, entities shall clarify information on the purpose of business relationship, transaction description and beneficiary;

5.2.4.If a customer is a legal entity, entities shall identify full name of beneficial owner, and take all reasonable measures to verify the identity of beneficial owner, and understand the ownership, share control and organizational structure of that customer;

5.2.5.If a customer is a legal person or authorized representative, person on its behalf shall verify whether the given customer holds such authority, identify full name and check it with the original document of that person;

5.2.6.Entities shall clarify full name, registration number, residential address, contact phone number and account number of payer and beneficiary of wire transfers between banks and other financial institutions.

/This subparagraph was amended according to the law of April 26, 2018/

/This subparagraph was amended according to the law of June 03, 2022/

5.3.Entities specified in Paragraph 4.1 of this law shall conduct detailed activity to identify high-risk customers by assessing customer risk level and it shall be regulated under the procedure specified in Paragraph 5.14 of this law.

/This paragraph was revised according to the law of April 26, 2018/

5.4.Entities specified in Paragraph 4.1 of this law shall be obliged to refuse to provide service if a customer refuse to provide information as stipulated in Paragraphs 5.2 and 5.3 of this law.

/This paragraph was amended according to the law of April 26, 2018/

5.5.The person specified in Paragraph 4.1 of this law may conduct customer identification in a simplified manner based on the risk assessment in accordance with the procedure set forth in 5.14 of this law within scopes stated in Subparagraphs 5.2.1 and 5.2.2 of this law.

/This paragraph was revised according to the law of April 26, 2018/

/This paragraph was revised according to the law of October 10, 2019/

5.5.1.If customer is a public and local administration or public company listed on the stock exchange that are subject to publicly report shareholder and beneficial owner;

/This paragraph was annulled according to the law of October 10, 2019/

5.5.2.Reporting entities with similar preventive requirements when dealing with each other.

/This paragraph was annulled according to the law of October 10, 2019/

5.6.Entities specified in Subparagraph 4.1.1 shall obtain the following information prior to establish correspondent relation with a foreign bank in order to make an international remittance, wire transfer, or payment:

5.6.1.information on business lines of the given bank activity;

5.6.2.information on reputation and public recognition of the given bank

5.6.3.approval from senior management regarding establishment of correspondent relation and information on mutually agreed rights and responsibilities of the parties;

5.6.4.whether the given bank has internal structure and monitoring programs for combatting money laundering and financing terrorism;

5.6.5.information whether the bank has been or is being investigated as linked to money laundering and financing terrorism investigation or regulatory actions.

/This paragraph was revised according to the law of April 26, 2018/

5.7.Entities specified in Paragraphs 4.1.1, 4.1.2, 4.1.3, 4.1.4, 4.1.5, 4.1.6, 4.1.7, 4.1.10 shall be prohibited to:

/This paragraph was amended according to the law of December 17, 2021/

5.7.1.to enter into relation with shell banks;

5.7.2.to enter into relation with banks that have relationship with shell banks; and

5.7.3.to continue relation with shell bank shall be prohibited if it had previously entered into a relationship.

/This paragraph was revised according to the law of April 26, 2018/

5.8.Entities specified in Paragraph 4.1 shall regularly identify and assess the money laundering or financing terrorism risks prior introducing to new products and new technology and undertake effective measures to minimize risk.

/This paragraph was revised according to the law of 26 April 2018/

5.9.The following customers shall be considered similar to high risk customers:

5.9.1.politically influential persons;

5.9.2.individual and legal entity from country, which is identified by international anti-money laundering and countering financing terrorism organizations as having inadequate anti-money laundering and countering financing terrorism systems.

5.9.3.individual and legal entity conducting activities in sectors identified as high risk by the National Risk Assessment.

/This paragraph was added according to the law of April 26, 2018/

5.10.Wire transfers to be received, intermediary processed, and transferred by the entities specified in Paragraph 4.1 of this law shall contain clear and complete information of payer and beneficiary and the financial institution should not remit, receive and transfer any transaction if it information of payer and beneficiary is not clear.

/This paragraph was added according to the law of April 26, 2018/

5.11.Entities specified in Paragraph 4.1 shall exercise constant control on the information specified in Article 5 of this law and shall update it at each occasion of change.

/This paragraph was added according to the law of April 26, 2018/

5.12.In case entities specified in Subparagraphs 4.1.1, 4.1.2, 4.1.3, 4.1.4, 4.1.5, 4.1.6, 4.1.7, 4.1.10 engage a third party to conduct customer identification, the procedure specified in Paragraph 5.14 of this law shall regulate the requirements for it.

/This paragraph was added according to the law of April 26, 2018/

/This paragraph was amended according to the law of December 17, 2021/

5.13.Conducting customer identification by a third party, it shall not be grounds for entities specified in Subparagraphs 4.1.1, 4.1.2, 4.1.3, 4.1.4, 4.1.5, 4.1.6, 4.1.7, 4.1.10 to exempt from legal liabilities.

/This paragraph was added according to the law of April 26, 2018/

/This paragraph was amended according to the law of December 17, 2021/

5.14.The President of the Bank of Mongolia shall approve the procedures for Preventive Measures from money laundering and financing terrorism that include the following detailed activities, upon consultation with a Cabinet member in charge of finance, a Cabinet member in charge of legal affairs, Head of the Financial Regulatory Commission and Head of the General Intelligence Agency:

5.14.1.detailed measures to identify beneficial owners;

5.14.2.customer identification activity;

5.14.3.enhanced customer identification activity;

5.14.4.requirements on when relying upon a third party to conduct customer identification activity;

5.14.5.detailed activity for conducting risk assessment;

5.14.6.details of anti-money laundering and countering financing terrorism internal program;

5.14.7.measures to undertake in relation to sanctions listing;

5.14.8.other related measures.

/This paragraph was added according to the law of April 26, 2018/

Article 6.Exclusive monitoring

6.1.Entities specified in Paragraph 4.1 shall undertake exclusive monitoring of the following transactions:

6.1.1.Transactions of large amount changed unusually;

6.1.2.Transactions that have no apparent economic or legal grounds;

6.1.3.Transactions conducted in the name of politically influential persons;

6.1.4.Transactions made via countries defined by anti-money laundering and countering financing terrorism international organizations as the strategically deficient in anti-money laundering and combating the financing of terrorism regimes.

6.2.Entities specified in Paragraph 4.1 shall undertake all possible measures to obtain additional information, explanations and examine purposes of transaction and business relationship and its quality specified in Paragraph 6.1 and shall document the findings within practical scope.

Article 61.Implementation of sanctions issued by the United Nations Security Council and other relevant authorities

/This Article was added according to the law of April 26, 2018/

61.1.The person specified in Paragraph 4.1 of this law shall be prohibited to provide services to persons, legal entities, any group or associations included in the list specified in Subparagraphs 3.1.17 and 3.1.18 of the Law on Proliferation of Weapon of Mass Destruction and Combatting Terrorism.

/This paragraph was amended according to the law of October 10, 2019/

61.2.Entities specified in Paragraph 4.1 of this law shall immediately freeze relevant accounts and movement of assets of a person, legal entity, group or association belonging to the sanctions list without prior notice and without decision of relevant authorities and prohibit him/her from making transactions and shall notify The Intelligence Agency and The Financial Information Unit immediately.

/This paragraph was amended according to the law of October 10, 2019/

61.3.Entities specified in Paragraph 4.1 of this law shall apply detailed customer identification measures on customers from countries and regions which were declared that having inadequate anti-money laundering and countering financing terrorism systems by the international organization in charge of anti-money laundering and financing terrorism and if it necessary, shall apply appropriate measures specified in laws and administrative legislative acts to the law enacted in compliance with respective law.

61.4.The procedure specified in Paragraph 5.14 of this law shall regulate relations with regard to delivery of sanction listing to entities stated in Paragraph 4.1 of this law, sanction and taking and implementing measures stated in legislation and preparing implementation report of these measures.

61.5.Reporting entities shall report the information specified in Paragraph 61.2 of this law in accordance with the procedures set forth in Paragraphs 23.2 and 23.6 of the Law on Proliferation of Weapon of Mass Destruction and Combating Terrorism.

/This paragraph was added according to the law of January 17, 2020/

Article 7.Reporting of transactions

7.1.Entities specified in Paragraph 4.1 of this law shall be obliged to submit a report of cash, foreign settlement transactions or virtual assets equivalent and above 20 million Tugrugs to the Financial Information Unit within five working days after making such transaction in accordance with approved procedure and format.

/This paragraph was amended according to the law of December 17, 2021/

7.2.If entities specified in Paragraph 4.1 of this law has suspected or known that an asset, income or transaction, or attempted transaction related to money laundering or financing terrorism, or related to proceeds of crime, it shall submit such Suspicious Transaction report to the Financial Information Unit within 24 hours in accordance with approved procedure and format.

/This paragraph was added according to the law of April 26, 2018/

7.3.Entities specified in Paragraph 4.1 of this law and in Articles 13 and 14 of the Law on Proliferation of Weapons of Mass Destruction and Combating Terrorism shall submit information to the Financial Information Unit in electronic form in accordance with the information submission regulation and form. The President of the Bank of Mongolia shall approve the procedure on and form for submitting information to the Financial Information Unit based on the proposals of the Cabinet member in charge of finance and budget, the Cabinet member in charge of legal affairs and the Chairman of the Financial Regulatory Commission.

/This paragraph was revised according to the law of January 17, 2020/

7.4.Entities specified in Paragraph 4.1 of this law shall provide information on specific transactions and their participants to competent law enforcement authorities and anti-terrorism authorities in accordance with the regulation jointly adopted by the President of the Bank of Mongolia and the Cabinet member of in charge of legal affairs.

7.5.When necessary, entities specified in Paragraph 4.1 of this law may submit in paper form with the authorization of the Head of the Financial Information Unit.

/This paragraph was added according to the law of January 17, 2020/

Article 8.Record keeping of information and documentation of customers

8.1.Entities specified in Paragraph 4.1 of this law shall retain information and records of transactions, accounts and information of customers obtained in accordance with Articles 5 and 6 of this law for duration of not less than five years after the transaction or the closure of the account.

8.2.Entities specified in Paragraph 4.1 of this law shall keep records and information specified in Paragraph 8.1 of this law in a way that they are available immediately to competent authorities.

Article 9.Information on suspicious transactions

9.1.Suspicious transaction information sent to the Financial Information Unit shall contain following information:

9.1.1.name and residential addresses of the entities specified in Paragraph 4.1 of this law and the identity of the officials who submitted the information;

9.1.2.information on customers and beneficiaries;

9.1.3.iformation on transaction description, value, execution form, date, account number, other participants of the transaction and account holder;

9.1.4.brief explanation of grounds and circumstance to suspect such transaction;

9.1.5.other related documents.

9.2.The Financial Information Unit shall have the right to request additional information, such as the account statement of the entity associated with suspicious transactions, copy of the documents used to open an account, and risk assessment documents of the customer from the entities specified in the Paragraph 4.1 of this law.

/This paragraph was added according to the law of April 26, 2018/

Article 10.Monitoring of accounts

10.1.If there are grounds to suspect that an account of a customer or an entity specified in Paragraph 4.1 of this law apply for money laundering and financing terrorism, the Financial Information Unit may monitor that particular account of the customer.

Article 11.Asset suspension and freezing

11.1.If there are grounds to suspect that a pending transaction apply for the purposes of money laundering or financing terrorism, the Head of the Financial Information Unit shall suspend such transaction for up to three working days and a court may extend the period if required.

11.2.The decision specified in Paragraph 11.1 of this law shall be delivered to the entity specified in Paragraph 4.1 of this law in writing, if not possible, the latter shall be notified by phone followed by written notice within 24 hours.

11.3.The Financial Information Unit shall undertake the following measures during the suspension of transactions in accordance with Paragraph 11.1 of this law;

11.3.1.to obtain necessary information from related local and foreign institutions;

11.3.2.if the established facts are sufficient to suspect that the given transaction had the purpose of money laundering or financing terrorism, then it shall be reported to the competent authorities and the related documents shall be sent to those parties for investigation;

11.3.3.if it is detected that the given transaction do not have the purpose of money laundering or financing terrorism, then the suspension decision shall be annulled and the entity specified in Paragraph 4.1 of this law shall be immediately notified.

Article 12.Exemption from liability

12.1.The submitting of reports by entities specified in Paragraph 4.1 to the Financial Information Unit and competent authorities, in accordance with provision of this law shall not be deemed as a breach of banking, professional, customer, business entity or organization, business or other secrecy confidentiality.

/This paragraph was amended according to the law of April 26, 2018/

12.2.If information submitted by entities specified in Paragraph 4.1 has not been proven to be related to money laundering and financing terrorism, it shall not serve as grounds to impose civil, criminal and other liability on the person and entity submitted such an information.

/This paragraph was amended according to the law of April 26, 2018/

12.3.Any harm caused to a citizen or a legal person due to suspension of specific transaction according to Article 11 of this law, shall not serve as grounds to impose civil, criminal and other liability on management and employees of entities specified in Paragraph 4.1 of this law and on employees of the Financial Information Unit and the Financial Information Unit.

/This paragraph was revised according to the law of April 26, 2018/

12.4.If any harm caused to a person or legal entity due to illegal actions undertaken by entities specified in Paragraph 4.1 and Financial Information Unit, it shall be settled according to the law of respective law.  

Article 13.Confidentially of information

13.1.Entities specified in Paragraph 4.1 of this law, its management and employees shall not disclose any information related to the transaction reported to the Financial Information Unit to another entity other than those specified in Paragraph 7.4 of this law.

/This paragraph was revised according to the law of April 26, 2018/

13.2.The head, supervisors, analysts and other officers of Financial Information Unit shall not disclose confidential information related to customers' transactions at any time in cases other than provided in law during their authority and even after discharge.

Article 14.Internal monitoring of reporting entities

/This Article was amended according to the law of April 26, 2018/

14.1.The entities specified in Paragraph 4.1 shall have an Internal Monitoring and Risk Management Program aimed at countering money laundering and financing terrorism adopted by its Board of Directors or equivalent management body.

14.2.The Internal Monitoring and Risk Management Program of the entity specified in Paragraph 4.1 of this law shall comply with the scope of business, specific features and organizational structure of the entity and shall enable effective measures to reduce and prevent the risk of money laundering and financing terrorism.

14.3.The affiliated financial entities, branches and subsidiaries of entities specified in Paragraph 4.1 of this law shall similarly implement the Internal Monitoring Program.

14.4.The following shall be included in the Internal Monitoring Program:

14.4.1.methodology for evaluating risks of money laundering and financing terrorism related to customers, products, services and delivery channels;

14.4.2.procedures for high-risk customer identification activity;

14.4.3.procedures for measures of minimizing risks of new technology and high-risk product and service delivery to customers;

14.4.4.procedures for customer identification activity and detailed identification activity;

14.4.5.procedures when engaging a third party for customer identification activity;

14.4.6.procedures for implementation of the sanctions issued by the United Nations Security Council, state and relevant international authorities;

14.4.7.procedures for exclusive monitoring;

14.4.8.procedures for correspondent banking relations;

14.4.9.procedures for money wire transfers and electronic payments;

14.4.10.procedures for the detection of suspicious transactions, the confidentiality of information, reporting to the Financial Information Unit and other competent authorities, procedures for the transfer and retention of documents;

14.4.11.procedures on the appointment and dismissal of employees in charge of implementation of the Law on anti-money laundering and countering financing terrorism and the Internal Monitoring Program, its rights and obligations;

14.4.12.internal training program to ensure implementation of the Law on anti-money laundering and countering financing terrorism and other relevant regulations;

14.4.13.other conditions and necessary requirements specified in administrative acts enacted in compliance with relevant laws.

14.5.The entity specified in Paragraph 4.1 of this law shall submit for registration the Internal Monitoring Program to the relevant supervisory body to which it belongs.

14.6.The entity specified in Paragraph 4.1 of this law shall monitor periodically the effectiveness of the Internal Monitoring Program through its board of directors and its committee or the independent internal audit unit.

Article 15.Transportation of cash across the borders of Mongolia

15.1.Travelers carrying more than 15 Million Tugrugs or equivalent amount of foreign currency, bearer negotiable instruments, e-money across the Mongolian border shall declare of it faithfully in the customs declaration forms.

15.2.Mongolian Customs General Administration shall consolidate cash declarations made in accordance with Paragraph 15.1 of this law and submit it to the Financial Information Unit every month under the relevant regulations.

15.3.The Head of Customs General Administration shall approve format of declaration form specified in Paragraph 15.2 of this law upon consultation with the Head of the Financial Information Unit.

15.4.It is prohibited for Mongolian and foreign citizen, stateless person to exit via Mongolian border carrying physical precious metal and foreign currency in cash equivalent to or more than monetary value of 20 million Tugrugs.

/This paragraph was added according to the law of April 15, 2022 and it shall be in force until January 1, 2023/

15.5.The physical precious metal and foreign currency in cash up to monetary value specified in Paragraph 15.4 of this law can cross Mongolian border by declaring them at the Customs.

/This paragraph was added according to the law of April 15, 2022 and it shall be in force until January 1, 2023/

CHAPTER THREE

COMPETENCE OF STATE AUTHORITIES

Article 16.Financial Information Unit

16.1.The Financial Information Unit shall be the autonomous and independent agency having functions to receive information related to money laundering, related crimes and violation, financing of terrorism, to receive information specified in Article 7 of this law from entities specified in Paragraph 4.1, to make analysis on information, and to submit vulnerable information to the competent law enforcement authorities if transactions and transaction attempts suspected with regard to money laundering and financing terrorism.

/This paragraph was added according to the law of April 26, 2018/

16.2.The Financial Information Unit shall operate alongside the Mongol Bank.

16.3.The Head of the Financial Information Unit shall approve shall approve the operation strategy and organizational structure of this unit, while the President of the Bank of Mongolia shall approve the operational budget based on the proposals made by the Head of the same unit.

/This paragraph was amended according to the law of April 26, 2018/

16.4.The President of Mongol Bank shall appoint and dismiss the Head of the Financial Information Unit upon consultation with the head of the competent law enforcement authority.

16.5.The Head of the Financial Information Unit shall meet the following requirements:

16.5.1.at least five years of relevant professional experience in banking, financial or legal sector;

16.5.2.to have no outstanding debts according to loans and guarantee collateral agreements;

16.6.The analysts and supervisors of the Financial Information Unit shall meet the following requirements:

16.6.1.at least two years of relevant professional experience in banking, financial or legal sector;

16.6.2.to have no outstanding liabilities according to loan and guarantee collateral agreements.

16.7.The Head of the Financial Information Unit shall be the senior state inspector, and supervisor and analyst shall be state inspectors of Financial Information Unit.

16.8.The President of Mongol Bank shall appoint the senior state inspector and the senior state inspector shall appoint the state inspector.

16.9.The Head, supervisors, and analysts of the Financial Information Unit shall have the power to conduct supervision, and obtain information from government agencies for the purposes of performing duties prescribed in law, when required.

16.10.The Head of the Financial Information Unit shall approve the regulation and guidance related to the internal activities of the Financial Information Unit.

/This paragraph was added according to the law of April 26, 2018/

Article 17.Function of competent law enforcement authority

17.1.The representatives of the competent law enforcement authority shall operate in the Financial Information Unit.

17.2.The representatives of the competent law enforcement authority shall have the right to conduct supervision and obtain information pursuant to Paragraph 16.9 of this law.

17.3.The Head of the Financial Information Unit shall appoint and dismiss the representatives under Paragraph 17.1 of this law based on consultation with the head of the competent law enforcement authority.

17.4.When required, competent law enforcement authority and the Financial Information Unit can appoint joint workgroup.

Article 18.Functions of the Financial Information Unit

18.1.The Financial Information Unit shall have the following functions, in addition to those provided in Articles 10 and 11 of this law:

18.1.1.to receive, collect, and analyze information reported from entities specified in Paragraph 4.1 of this law as well as information in databases of relevant similar local and foreign institutions;

18.1.2.if there are sufficient grounds to suspect that the given transaction had the purpose of money laundering or financing terrorism, then it shall be disseminated to the competent law enforcement authorities and anti-terrorism agencies according to the regulations and to compile a database on reports of suspicious, cash and non-cash transactions submitted to the competent authorities;

18.1.3.to provide on a timely basis general information on due diligence conducted on suspicious transactions and on the general types and methods of those transactions in order to support the detection and reporting of suspicious transactions by reporting entities;

/This paragraph was revised according to the law of October 10, 2019/

18.1.4.to develop and provide a methodology to monitor and detect suspicious transactions and examine information related to money laundering and financing terrorism and monitor its implementation by the entities specified in Paragraph 4.1;

18.1.5.to enhance public awareness to combat and prevent money laundering and financing terrorism;

/This subparagraph was amended according to the law of April 26, 2018/

18.1.6.to inform the reporting entities about the sanctions list to entities specified in Paragraph 4.1 of this law and organize the implementation thereof;

/This subparagraph was added according to the law of April 26, 2018/

18.1.7.to prepare consolidated statistics about supervision conducted on implementation of Law on anti-money laundering and countering financing terrorism, perform supervision and have supervision conducted by other authorized entity;

/This subparagraph was added according to the law of April 26, 2018/

18.1.8.to organize national risk assessments of anti-money laundering and countering financing terrorism, to draft national strategy based on risk assessment, then to present it for consideration to the Cooperation Council;

/This subparagraph was added according to the law of April 26, 2018/

/This subparagraph was amended according to the law of December 17, 2021/

18.1.9.to organize measures to implement recommendations issued by international anti-money laundering and countering financing terrorism organizations.

/This subparagraph was added according to the law of April 26, 2018/

18.2.The supervisors of the Financial Information Unit shall have the power to examine the compliance of the laws on anti-money laundering and countering financing terrorism and to require rectification of any breaches of this law by entities specified in Paragraph 4.1 of this law, to transfer it to the competent authorities for inspection or to make recommendations to be settled by the competent authorities including the cancellation of licenses.

/The word "special" stated in this paragraph was modified according to the law of 17 June 2022 and it shall be in force from January 01, 2023/

18.3.Financial Information Unit shall monitor how entities specified in Paragraph 4.1 of this law and their officers fulfill their obligations specified according to this law.

18.4.The Financial Information Unit shall submit an annual report of its activities on a yearly basis to the Financial Stability Council.

18.5.The head of the Financial Information Unit and its officers shall have the right to obtain references from the state registration, property registration, social insurance registration, and border crossing registration, investment registration, and records of transactions between banks financial institutions, tax collection records from the competent authorities for the purposes of performing their duties prescribed in this law.

/This paragraph was added according to the law of April 26, 2018/

18.6.The Financial Information Unit shall cooperate with the competent authorities in the field of preventing the proliferation of weapons of mass destruction and anti-money laundering and countering financing terrorism, exchange information, and provide support and assistance in the investigation and prosecution of crimes. 

/This paragraph was added according to the law of October 10, 2019/

Article 19.Monitoring and ensuring compliance of reporting entities

/This Article was amended according to the law of April 26, 2018/

19.1.The Bank of Mongolia shall ensure compliance with obligations of entities specified in 4.1.1 of this law, and ensure their implementation, the Financial Regulatory Commission shall ensure compliance with obligations of entities specified in Subparagraphs 4.1.2, 4.1.3, 4.1.4, 4.1.5, 4.1.6, 4.1.7, 4.1.8, 4.1.10 of this law, and ensure their implementation and Mongolian Bar Association, Association of Advocates, Chamber of Notaries, Mongolian Institute of Certified Public Accountants, Financial Information Unit and authorized body of issuing and monitoring respective license ensure compliance with obligations of entity specified in Subparagraph 4.1.9 of this law, according to risk based approach, respectively.

/This paragraph was amended according to the law of May 30, 2019/

/This paragraph was amended according to the law of October 10, 2019/

/This paragraph was amended according to the law of January 17, 2020/

/This paragraph was amended according to the law of December 17, 2021/

/The words "operational permit, special" stated in this paragraph were amended according to the law of 17 June 2022 and it shall be in force from January 01, 2023/

19.2.Competent authorities specified in Paragraph 19.1 of this law and the Financial Information Unit shall take the following actions in relation to monitoring compliance with this law:

19.2.1.to perform on-site and off-site supervisions, to issue guidelines, regulations and recommendations and inspection directives for entities specified in Paragraph 4.1 of this law;

19.2.2.to obtain the documents, reports, information and explanations for ensuring the implementation of the obligations of this law from entities specified in Paragraph 4.1 of this law;

19.2.3.to set requirements for significant shareholders, sources of share capital, executive management and staff entities specified in Paragraph 4.1 of this law;

19.2.4.if a participant to a financial group is registered or located in another country, the agency responsible for the relevant inspection shall cooperate with the competent authorities of that country by signing a memorandum of understanding and agreement, for exchange information and joint supervision;

19.2.5.competent authorities in charge of the relevant supervision of entities specified in Paragraph 4.1 of this law shall cooperate with each other in and with the Financial Information Unit, to ensure unity of inspection activities;

19.2.6.to publicize and maintain statistics concerning measures adopted and sanctions imposed in enforcing this law;

19.2.7.to conduct joint supervision with the Bank of Mongolia, the state central administrative organ in charge of finance and budget and the Financial Regulatory Commission if they deem necessary to monitor the implementation of the law within the financial group.

19.3.The entities specified in Paragraph 4.1 of this law and their competent officers and staff shall provide inspectors with the conditions to practice their powers and conduct the supervisory process independently and autonomously.

19.4.If deemed necessary the Financial Information Unit can conduct joint supervision over entities specified in Paragraph 4.1 of this law with authority specified in Paragraph 19.1 of this law how they execute their obligations prescribed in the law.

Article 20.Database

20.1.The Financial Information Unit shall have a unified database of information compiled in accordance with the provisions of this law.

20.2.The Head of the Financial Information Unit shall approve the regulation on storage and use of information in the database specified in Paragraph 20.1 of this law.

Article 21.Cooperation with similar foreign institutions

21.1.The Financial Information Unit should cooperate with foreign and international organizations with similar functions and of the same level of confidentiality requirements in accordance with respective legislation.

21.2.The Financial Information Unit may provide required information at the request of the institutions specified in Paragraph 21.1 and in accordance with the respective legislation.

CHAPTER FOUR

MISCELLANEOUS

Article 22.Cooperation Council

22.1.The Cooperation Council with function to ensure the implementation of laws related to anti-money laundering and countering financing terrorism, exchange information, risk minimization, and preparation of recommendations on preventative measures should operate next to the Financial Information Unit.

22.2.The Cooperation Council shall consist of representatives of state central administrative organs in charge of foreign affairs, finance, justice, prosecutor's office, Bank of Mongolia, Financial Regulatory Commission, law enforcement authorities, organizations responsible for countering terrorism, taxation and custom office and the Financial Information Unit.

22.3.The Financial Information Unit shall undertake the official service of Cooperation Council.

22.4.The President of Mongol Bank shall approve functional regulation, its composition and management of the Cooperation Council.

Article 221.National Council

/This Article was added according to the law of April 26, 2018/

221.1.The National Council with the function to develop a national anti-money laundering and countering financing terrorism policy and program to be approved by the competent authority and to take measures to implement it, shall operate and the Government shall approve the governing official and the composition of the Council based upon proposal of the Prime Minister. 

/This paragraph was amended according to the law of January 17, 2020/

/This paragraph was amended according to the law of December 17, 2021/

221.2.The National Council shall consist of representatives from the Prosecutor's Office, the Bank of Mongolia, the Financial Regulatory Commission, the State Central Administrative Organizations in charge of finance, legal and foreign affairs, authorized agencies of law enforcement and countering-terrorism, tax and customs authorities, and the Financial Information Unit.

/This paragraph was amended according to the law of January 17, 2020/

221.3.The Financial Information Unit shall undertake the official service of National Council. 

Article 23.Liabilities for the violators of the law

23.1.Liabilities shall be imposed on those who breach this law in accordance with respective laws.

23.2.If it is detected that a violation of this law and legislative acts issued in compliance with the law or might to violate as a result of inspection or non-compliance with the requirements of the license does not have nature of a crime or an offense, public official of the competent authorities specified in the Paragraph 19.1 of this law shall impose the following liabilities in consideration of arisen condition and breach;

/This paragraph was added according to the law of April 26, 2018/

/The word "special" stated in this paragraph was modified according to the law of 17 June 2022 and it shall be in force from January 01, 2023/

23.2.1.to give a warning notice, a notice or a timed assignment in regards with rectifying the breach;

23.2.2.to assign to take measures to improve, strengthen structure, operations, risk management, and internal monitoring of entities specified in Paragraph 4.1 of this law;

23.2.3.to make a proposal to suspend or partially or completely restrict, terminate, suspend or revoke the license of entities specified in Paragraph 4.1 of this law;

/This subparagraph was amended according to the law of May 30, 2019/

/The words "operational permit, special" stated in this subparagraph were amended according to the law of June 17, 2022 and it shall be in force from January 01, 2023/

23.2.4.to issue orders to dismiss, suspend and change the authorized officials of the entities specified in Paragraph 4.1 of this law.

23.3.If the officials do not comply with the rectification measures as giving a warning notice, a notice or a timed assignment specified in Paragraph 23.2 of this law, liabilities specified pursuant to the Law on Offence shall be imposed.

/This paragraph was added according to the law of April 26, 2018/

Article 24.Entry into force of the law

24.1.This law shall entry into force on May 31, 2013.

CHAIRMAN OF THE STATE GREAT KHURAL OF MONGOLIA ENKHBOLD.Z